Human Capital and the Theory of Life-Cycle Investing

Financial Planning
Measured Reality: What It Takes to Reach a Net Return Goal
Many strategies promise to "beat the market" but fail to deliver what they promise because their stated return goals are "gross" returns--before taxes and costs. Here's how to translate those goals into a reasonable expectation of what the strategy's actual--net--return will be.

Stock Screens
Martin Zweig's Winning Approach to Investing in Long-Term Growth Stocks
Investors looking for growth prospects seek firms that are leading the pack, but that will also maintain that lead in the years ahead. This is the approach advocated by Martin Zweig. A look at AAII's screen that follows the Martin Zweig approach.

Features
Turmoil in the Marketplace: What's Going on With Municipals?
Losses from the current credit market crisis have affected bond insurance firms--firms that guarantee municipal bonds--and placed the entire municipal bond market under a cloud. There has been little clarity about how the problems affect the bonds under guarantee. Shedding some light on what's going on in the muni markets.

Offbeat Offerings
Offbeat Offerings: Treasury STRIPS
An investor reference for products that are not your typical offering. This issue's focus is on Treasury STRIPS.

Stock Strategies
The Stock Market and the Media: Turn It on, But Tune It Out
Many investors believe that keeping abreast of the news is one key to investment success. But Dick Davis believes one of the worst things that can happen to long-term investors is to be instantly and totally informed about their stocks. Here's why.

Hot Links
Commodities Trading
For those interested in directly investing in the commodities market, there are many Internet resources to help you analyze, pick and track your investments.

First Cut
The First Cut: S&P 500 Stocks With High Payout Ratios & Below-Average P/Es
A starting point for investors. This issue's focus is on S&P 500 stocks with high dividend payout ratios and below-average price-earnings ratios.

Investor Professor
Measured Reality: What It Takes to Reach a Net Return Goal
Many strategies promise to "beat the market" but fail to deliver what they promise because their stated return goals are "gross" returns--before taxes and costs. How can you translate those goals into a reasonable expectation of what the strategy's actual--net--return will be? A look at one approach.

AAII Model Portfolios
ETFs Get Active: AAII's Model Portfolio and the Evolving Marketplace
The AAII model portfolio of exchange-traded funds (ETFs) year-to-date is outperforming the market, but unfortunately "outperformance" only means going down less than the market. An update on the portfolio and its holdings.

Portfolio Strategies
Human Capital and the Theory of Life-Cycle Investing
Life-cycle theory, first developed in the 1970s, points out that each person has both human and financial capital, with the former being most important. While it seems like a small change to focus more on human capital, it has major planning implications.

Departments
Briefly Noted
Current news items of interest to individual investors.

Departments
Letters to the Editor
Member questions and comments on recent AAII Journal articles.